Issue 1

Is your AWS environment cost optimized?

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AWS Cost Management: 4 Things Every CIO Should Consider

Are you spending more on Cloud than you should?

Enterprise IT is embracing Cloud rapidly. A recent study showed that 72% of organizations have at least one application or a portion of their computing infrastructure in the Cloudi. The study found that 25% of IT budgets in 2016 will be allocated to Cloud computing. The good news is that Cloud will assist CIOs meet their “speed and feed” goals. The bad news is that CIOs, in most instances, can’t tell if they are spending more on Cloud than they should. The looming question in the coming months will be, “Am I wasting Cloud resources?”

Gartner points to the waste of resources as a key challenge facing Infrastructure & Operations (I&O) leaders: The business (by which we mean business units, teams and even individuals) is, in some cases, taking advantage of cloud infrastructure as a service (IaaS) without realizing its true business value, and wasting valuable resourcesii.

Cost management of Cloud infrastructure should be a matter of concern for every enterprise. IT departments have been trained to think in terms of fixed – not dynamic – capacity. While enterprises embrace Cloud primarily to reduce their total cost of ownership, the dynamic nature of Cloud models can defeat the cost-containment goal. With enterprises predicting that on average they will spend US$2.87 million in Cloud technologies in 2016iii, even a 10% reduction in costs can prove to be significant.

Where do the leaks in costs occur? How can they be plugged? Where are the opportunities to optimize usage and reduce wastage? What are the processes and tools required to identify these opportunities? How can cost management for Cloud be simplified and institutionalized without compromising business flexibility and agility? Our experience has shown that even medium size customers buying AWS can harvest savings of between 35 and 40%iv. No CIO can afford to willfully ignore this fact.

2AWS Cost Management: 4 Things Every CIO Should Consider

5Featuring Gartner ResearchThree Steps to Establishing an Enterprisewide, Cloud IaaS Strategy

9About Microland

Is your AWS environment cost optimized? is published by Microland. Editorial supplied by Microland is independent of Gartner analysis. All Gartner research is © 2014 by Gartner, Inc. All rights reserved. All Gartner materials are used with Gartner’s permission. The use or publication of Gartner research does not indicate Gartner’s endorsement of Microland’s products and/or strategies. Reproduction or distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner’s Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see “Guiding Principles on Independence and Objectivity” on its website, http://www.gartner.com/technology/about/ombudsman/omb_guide2.jsp.

i2015 IDG Enterprise Cloud Computing Survey: http://www.scribd.com/doc/290037560/2015-IDG-Enterprise-Cloud-Computing-SurveyiiGartner, Three Steps to Establishing an Enterprise wide, Cloud IaaS Strategy, Tiny Haynes, 21 April 2015iii2015 IDG Enterprise Cloud Computing Survey: http://www.scribd.com/doc/290037560/2015-IDG-Enterprise-Cloud-Computing-SurveyivNon-SaaS / stable workloads can at best be 20%

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Is your AWS bucket really leaking?

How vulnerable are you to high AWS bills? Answering that question at a fundamental level isn’t as difficult as it sounds. Ask yourself these five simple questions and chances are they will produce reasonably reliable answers.

1. Do you have business teams buying and managing their own AWS accounts? If your answer is “Yes”, the chances of leaks are high.

2. Do you have accounts that have workloads with highly varying usage and utilization patterns? If your answer is “Yes”, there is a possibility of leaks.

3. Is your account management and resource provisioning / de-provisioning centralized, standardized and automated? If no, you are vulnerable to leaks and your AWS deployment could be costing more than it should.

4. Do you have a team that is a combination of technical and financial functions tasked with and measured on the primary responsibility of optimizing costs over other aspects on an ongoing basis? If no, you are a candidate for leaks and must consider action.

5. Do you use cost optimization tools (other than metering and billing tools) that have inbuilt best practices and can be customized to organizational scenarios and provide you resource-level cost optimization actions? If no, there is a possibility of a leak.

The 4 Keys to Cost Management for CIOs on AWS

Once you understand how vulnerable you are, cost management need not be an uphill task with these 4 modest insights:

1. Cost management is a critical element in AWS management: Traditionally IT has focused only on managing and monitoring resources (OS and above). This is dangerous in Public Cloud scenarios. It is practically impossible to map Public Cloud usage accurately to businesses, projects, teams and users. This is because IT buying is not centralized. Different units in an enterprise are independently obtaining and provisioning their resources in Cloud, without IT intervention. The four key elements of AWS management -- Account management, Cost management, Compliance management and DevOps management – are therefore not being monitored and managed as closely as desirable.

2. Cost management can be easy but only if you know what to look for: Cloud costs depend on Service Usage, Resource Utilization, Provisioning Process and Architecture. Each of these usage parameters and the metrics associated with them need to be precisely monitored, measured and made available as comprehensive costs insights to the CIO. This spend data must be precisely mapped to various Cloud users and business groups as a pre-requisite to cost management.

3. It is not just about tools: There is no single tool that automatically saves costs when you deploy it on your AWS account. The existence of such a tool is a myth. Tool output will remain what it is: placing data in your hands for analysis. What you need is effective analysis for actionable insights contextualized to your environment. This means AWS cost management should include stages of infrastructure discovery, policy definition, expert audit and analysis to identify usage patterns and deliver contextualized action plans.

4. Cost management is an ongoing process: AWS feature releases are rapid. While this is a major reason enterprises want to embrace AWS, it is also worrisome. Continuous monitoring of cost becomes a bigger challenge. Since things keep changing on AWS, cost monitoring must also become an ongoing activity. By implication, your tools also need to be updated on an ongoing basis – and the final output, post analysis, needs to be re-examined continuously.

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The challenges this presents for the CIO are multifold. But today’s CIOs also understand that the internal Cloud buyer has continuous access to AWS and can buy anytime, for any duration, with functionality and faster time to market as the objective. Cost management does not figure in the concerns of the business buyer. And with CIOs unable to track, monitor and control Public Cloud consumption, costs can spiral out of control.

What Every CIO Wants

What the CIO wants is a way of continuously identifying and plugging potential cost leaks. This means a CIO should:

• Know the cost/ health of BUs, projects, workloads and accounts on AWS at all times

• Be able to continuously update the rules-engine with cost reduction best practices

• Acquire a reliable view of usage patterns and be able to map these patterns to complex AWS cost and purchase models

Case Study Microland delivered savings of over 33% for a leading US-based multinational SaaS provider leveraging its AWS cost optimization expertise.

Client-Industry context

As a SaaS provider serving a variety of industries like engineering, construction, manufacturing, media, and entertainment the client is constantly developing, staging and testing several products. In order to reduce hardware constraints and bring down dev test cycle times, the client was using the Amazon Web Services (AWS) environment.

While AWS met the dev, test and staging resource needs of project owners, decentralized buying by multiple teams and stakeholders was resulting in uncontrolled costs.

Despite using world class cost management tools, the client was unable to accurately identify cost take out actions.

Microland changed this by using its expertise in AWS products, combining it with proprietary and third party toolsets, to customize the client’s AWS infrastructure and reduce costs.

The engagement required Microland to analyze AWS products/services that included EC2, VPC, EMR, S3, EBS, Glacier, CloudFront, RDS, SimpleDB, DynamoDB and Redshift.

Microland’s AWS Cloud Lifecycle Services

Microland’s AWS Cloud Lifecycle Services enable CIOs meet the above objectives. Microland assists its customers to identify workloads that could be moved to AWS and then manage these workloads to provide maximum gains (within a short time and at minimum risk) on an ongoing basis.

A judicious combination of proprietary methodology, best practices, AWS certified specialists and tools help us customized services and solutions that solve customer-specific challenges before, during and after moving their workloads to AWS.

Microland addresses this by:

• Now2Cloud™ Framework to select and migrate the right workloads thereby maximizing your investments

• SmartGovern™, our proprietary toolset, coupled with our IT Infrastructure pedigree of a quarter century spanning global customers, to manage AWS environments on an ongoing basis in a cost optimized, performance optimized and in a compliant manner

• SmartDevOps™, our built-for-purpose solution that enables your DevOps journey on AWS environments

Benefits Delivered

Our approach is primarily focused towards continuously identifying cost leak points. This is achieved by obtaining an understanding of business units and project needs/ workloads to continuously refresh the rules engine and deploying best practices.

The result of our intervention is simple: while Microland focuses on cost leaks, IT can focus on business enablement.

To ensure Microland meets the needs of a large spectrum of clients, their engagement models are flexible and outcome based. Clients can pick from Gain Share of Fixed Cost models for point-in-time engagements and for on-going engagements, Microland has a Scale Based or Spend Based models for maximum ROI.

Source: Microland

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Featuring Gartner Research

Three Steps to Establishing an Enterprisewide, Cloud IaaS Strategy

Cloud infrastructure as a service is increasingly enabling IT buying decisions to be made beyond the control of the IT department, bringing new business risk. In response, I&O leaders should establish a cloud IaaS strategy, set enterprisewide adoption guidelines and create a cloud service brokerage.

Key Challenges

• Forty percent of IT spending is occurring outside the IT department, meaning infrastructure and operations (I&O) has less control over IT.

• The business (by which we mean business units, teams and even individuals) is, in some cases, taking advantage of cloud infrastructure as a service (IaaS) without realizing its true business value, and wasting valuable resources.

• The business does not always consider the security, regulatory compliance and data sovereignty implications of cloud IaaS, thereby increasing risk.

Recommendations

I&O leaders should:

• Devise and disseminate criteria for adopting cloud IaaS to the whole business, as well as educational material on the value of the technology.

• Establish a cloud IaaS service brokerage within the IT department.

• Inventory and evaluate existing systems outside the control of IT and review with line-of-business leaders.

Introduction

Cloud IaaS has further enabled business units, teams and sometimes individuals to make IT buying decisions — and fund those decisions — outside the control of the IT department. These groups, hereafter referred to simply as “the business,” are relying on cloud IaaS to host and develop consumer-facing and B2B content. Based on Gartner inquiry and research, they are also using it to host and develop general applications and enterprise applications, such as Web

applications, disaster recovery and high-performance compute solutions.

With so many IT decisions happening outside the IT department, the potential for security and compliance breaches increases. This is because different lines of business consider their own isolated application requirements rather than the underlying security and compliance issues. In addition, it is possible for the business to deploy solutions that lack a clear business case or ROI, although these are not the IT department’s ultimate responsibility since IT budget is now not necessarily held by the IT department exclusively. In some cases, the business may take advantage of cloud IaaS simply for “cloud sake” — in other words, business leaders may begin a cloud initiative under the misconception that the cloud inherently delivers cost savings and/or drives competitive advantage.

While the IT department may not necessarily be able to reassert its control over all IT decisions, IT leaders should establish a businesswide, cloud IaaS strategy, if for no other reason than to reduce risk. This strategy should include educating the business on the value of cloud IaaS, and establishing and disseminating clear guidelines for using such technology. The strategy should also include the formation of a cloud brokerage within the IT department to help inform technology buying decisions and re-establish the department’s footing. To fortify the department’s brokerage role, the brokerage team should review specific applications across the business, determine their viability for transition to cloud IaaS and share those findings with line-of-business leaders. Finally, a new form of IT role should be established, one that works with the lines of business to educate and assist the role out of cloud technologies and concepts to all IT users.

Analysis

Devise and Disseminate Policy and Educational Concepts for Adopting Cloud IaaSIT leaders should establish clear, businesswide educational concepts for adopting cloud IaaS. See “The Top 10 Cloud Myths” for guidance on what should form the

introduction of such a strategy document. These criteria should include recommended use cases wherein the business value of cloud IaaS is clear. In Table 1, we provide sample use cases as they relate to realizing the potential benefit of adopting cloud IaaS.

Criteria should also account for the risks associated with the technology. In Table 2, we provide adoption criteria based on alleviating the risk posed by cloud IaaS. (For more information on cloud IaaS benefits and risks, see “Technology Overview for Cloud Infrastructure as a Service.”)

See “Toolkit: Mitigating Risks in Cloud Infrastructure as a Service” for more guidance.

To enforce adherence to criteria, IT leaders should seek buy-in and sign-off from senior management. Establishing a cloud IaaS service brokerage, under the oversight of senior management, as detailed in the following section, will also help in building the IT team’s thought-leadership position and authority.

Also, note that the business case for using cloud IaaS must have a clear ROI factoring in not only costs but also the benefits of business agility. Cloud IaaS is not always a cheaper alternative to do-it-yourself infrastructure, but with rapid deployment and scalable infrastructure other benefits might outweigh the pure cost measure. For instance, using cloud IaaS to scale and meet the demands of an increase in Web traffic for a one-day online sale may be considerably cheaper than building a data center that can support that workload. However, should that traffic persist for an extended period of time, building a data center may become the cheaper alternative.

Once criteria are established, IT should share those criteria with the business. Gartner recommends sharing criteria through a well-written, nontechnical paper. By doing this, an IT department can, if not re-establish its role as trusted technology advisor, then at least produce sensible guidelines to help in the selection and deployment of different cloud IaaS services.

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Benefit Benefit Description Sample Use Case Criteria

Business Agility • The ability to provision and deprovision resources within seconds, enabling the infrastructure size to match demand

• To support an e-commerce site that needs to react to differing demand loads per day

• To support the test and development that occurs on a nonpredictable basis (e.g., testing a security patch for a zero-day vulnerability, in a rapid time frame)

Cost Reduction • The ability to provision workloads on an as-needed basis, eliminating the need to purchase or lease hardware

• The ability to automatically provision workloads, eliminating manual intervention and related labor costs

• The ability to move from a capex to an opex model, providing a consumption-based approach to IT rather than paying off IT hardware over a three-year period with greater chance of obsolescence during the term

• To support test and development cycles that are measured in weeks

• To support e-commerce websites for shopping periods or online gaming

Local Presence • The ability to provision infrastructure in a geographic presence where clients do not have IT operations

• The ability to achieve compliance with local country regulations in respect of data sovereignty

• To provision IT infrastructures in new regions

Rapid Elasticity • The ability to automatically scale due to unexpected events

• To support unusual website traffic caused by viral marketing or price promotions

capex = capital expenditure; IaaS = infrastvructure as a service; opex = operational expenditure

Source: Gartner (April 2015)

Table 1. Cloud IaaS Adoption Use-Case Criteria Based on Business Value

Risk Risk Description Sample Risk-Aversion Criteria

Loss of Control • The loss of ability to move virtual workloads off physical devices in order to manage workload performance

Requirement to allow selected workload migration from physical devices

Security • The inability to perform security audits of infrastructure and, consequently, having to rely on a third-party audit

Moving from a hardware-based, on-premises appliance to a software-based, externally hosted service

Requirement to allow third-party, independent audit of physical and logical infrastructure

Data Location • Data being located outside a physical country Requirement to stipulate the country of residence for the physical servers

Availability and Performance

• Loss of service or degraded performance as a result of factors outside the control of your IT team

Requirement for a service level guarantee for performance and availability of infrastructure

IaaS = infrastructure as a service

Source: Gartner (April 2015)

Table 2. Cloud IaaS Adoption Criteria Based on Risk

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This paper should include the following sections:

• An overview of the value of cloud IaaS, including when to use and not use cloud IaaS, so as to dispel any misconceptions. An example of a decision flow can be found in Figure 1 below.

• The impact of using cloud IaaS on operations and existing business processes, including the transition of infrastructure from a capital expenditure (capex) to an operational expenditure (opex).

• Criteria for using cloud IaaS based on realizing business value, reducing risk and achieving ROI.

• Information on the policy and workflow for procuring cloud IaaS solutions through the IT department, should the department choose to assert itself as a brokerage.

• Specific providers that may be the best “fit” for the organization because of their

Source: Gartner (April 2015)

FIGURE 1Decision Flow for Cloud Adoption

service delivery experience, existing business relationships with other parts of the organization, attractive service pricing, substantive SLAs, partnerships with incumbent network service providers, referenceable customers with similar business requirements, and IT’s own experience (if applicable) with the providers themselves.

Optionally, the paper can also include a section with analysis of current business practices and how those processes can become more streamlined and flexible through cloud IaaS. This section could include, for example, an overview of how a specific company website could be enhanced by building microsites that take advantage of a trending product or service that can be switched on and off within minutes.

Establish a Cloud Service Brokerage Within the IT Department

While the IT department is building criteria for using cloud IaaS, it should also work to rebuild itself, creating a cloud service

brokerage within the department. At Gartner, we call this approach — where IT is both a provider of internal dedicated and private cloud services, and a broker of external services — “hybrid IT.”

Detailed steps for transitioning to a hybrid IT department can be found in “Become a Cloud Enabler by Following Our Eight Steps to Hybrid IT.” By transitioning to hybrid IT, the department can reassert its coordination over IT, reducing the risk of poor technology decisions and establishing itself as a trusted technology advisor.

While hybrid IT may support many cloud services, special considerations must be made for supporting cloud IaaS. These include:

• The ability to monitor cloud IaaS offerings in respect of performance, availability and security compliance

• The impact of IaaS availability on business-critical applications by clearly documenting the interrelationship

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between the IaaS applications and back-end applications hosted within the private cloud

• The auditability of the data that is being moved between the private and public cloud to ensure data compliance is being adhered to at all times

• The auditability of data protection and confidentiality management

• The ability to assist business units in evaluating and selecting a cloud IaaS provider

• The consultation with the business in designing or deploying application architectures in a cloud IaaS environment

• The enforcement and monitoring of security configurations and protections

• The ongoing analysis of financial consumption

• An in-depth examination of business processes to see where they can be automated and integrated with cloud management platforms

Inventory and Evaluate Existing Systems for Cloud IaaS Viability

As part of building its validity, and ensuring ongoing improvement to the business, the IT team should take an inventory of IT systems outside the control of its department. Once the systems are inventoried, the IT team should look for the following:

• Existing cloud IaaS deployments that pose a security or compliance risk: Audit the type of data that is being held in the IaaS platform. Does it contain financial or personally identifiable information that might be subject to regulation? Is it subject to local data sovereignty rules restricting where it can be hosted? Could the information be used to cause reputational damage if it was accessed outside a normal controlled environment?

• Existing cloud IaaS deployments that lack a clear business case: Understand the business reason for the existence for the IaaS deployment. Look for pilot projects or proof of concepts that are no longer being utilized. Ensure there is clear business unit ownership for the IaaS infrastructure, and strong life cycle management.

• Existing systems that, if moved to the cloud, could result in a tangible business benefit: Could the systems be used in a more agile way, thus saving capex? Does the environment require the ability for rapid scaling to meet the business or customer requirements?

• Best practice cloud IaaS deployments from which to learn: Successful internal cloud IaaS deployments can function as a model for future usage across the business. For an example of a successful cloud IaaS deployment, see “Chemical Leader M&G Achieves a Fully Cloud-Based, Lean and Low-Cost IT.”

• Ease with which the organization could port the application(s) to other providers, or even back to an internal private cloud if economic and manageability conditions so dictate.

After evaluating systems, the IT team should then review findings with the related application manager and line-of-business leader, and undergo learning and championing exercises.

Source: Gartner Research Note G00270148, Tiny Haynes, 21 April 2015

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About Microland

Microland is India’s first Hybrid IT Infrastructure Services provider and a trusted partner to enterprises in their IT-as-a-Service journey. Incorporated in 1989 and headquartered in Bangalore, India, Microland has 3000+ specialists across its offices in Europe, Middle East, North America and India.

Microland enables global enterprises to become more agile and innovative through a comprehensive portfolio of services that addresses hybrid IT transformation, workspace transformation, service transformation and end-to-end IT Infrastructure Management. Microland leverages analytics, automation and assurance to deliver reduced TCO, greater IT-Business Alignment and higher SLAs for its customers, through a unique IP built into its service delivery platform.

Microland has leveraged its understanding of the industry and business expectations from the CIO to build a comprehensive suite of frameworks, tools and methodologies that enable enterprises to move away from a technology-led to a services-led model. These include:

• Services-led ITSM Model: Enables enterprises to transition to an ‘as-a-service’ model with the key tenets of - predictability, agility, cost effectiveness, and user experience

• SmartCenterSM: Automation and ITSM platform that provides business orchestration, an analytics engine and ITIL v3 service desk

• MOTIFSM (Microland’s Operations Transformation and Integration Framework): Guarantees operational excellence in service fulfillment, innovation and governance

Microland has strategic partnerships with AWS, Citrix, Microsoft and VMware in the emerging technology areas and works very closely with these technology alliances to deliver services around their technologies in the Hybrid IT and Workspace Transformation space.

Microland has been rated amongst the Top 10 Infrastructure Management Providers by Global Services, Microsoft’s Best Indian Infrastructure Partner for the 8th consecutive year, Major Contender in IT Infrastructure Services & Emerging Player in Cloud Infrastructure Services by Everest Group, one of the leading service providers in Remote Network & Voice Infrastructure Management Services by Gartner, ranked amongst the Top 20 Global Cloud Computing Companies by CIO Review and the Top 20 Remote Infrastructure Management Vendors by the Black Book of Outsourcing.

“Microland V4.0 can help businesses become more agile & innovative through a structured transformational approach towards Hybrid IT in their IT-as-a-Service journey, while simultaneously improving efficiency and effectiveness of their existing IT infrastructure through automation & process re-engineering.” – Pradeep Kar

Request a ProposalPlease let us know what service you are interested in by emailing us on info@microland.com.